Prime Minister Stephen Harper says if re-elected he will increase the amount of tax-free withdrawals from RRSPs for first time homeowners and collect...more

Prime Minister Stephen Harper says if re-elected he will increase the amount of tax-free withdrawals from RRSPs for first time homeowners and collect data on whether foreign speculators are driving up the cost of homes to unaffordable levels.

Video by

Conservative Leader Stephen Harper makes a campaign stop at the shipyards in North Vancouver, B.C. on Wednesday, August 12, 2015.

VANCOUVER — A re-elected Conservative government would begin to collect data on foreign home ownership with a view toward limiting the impact such ownership has on tight housing markets in Vancouver and Toronto.

Using the backdrop of North Vancouver, a community once popular for middle-income home hunters but increasingly becoming unaffordable to them, Prime Minister Stephen Harper pledged during a whistle-stop campaign event Wednesday to spend $500,000 next year to determine how much foreign home ownership is affecting home affordability.

“There are real concerns that foreign, non-resident real estate speculation is the reason some Canadian families find house prices beyond their budgets,’’ Harper said.

“If such foreign non-resident buyers are artificially driving up the cost of real estate, and Canadian families are shut out of the market, that is a matter we can and should do something about.’’

Harper’s foray into the debate over foreign home ownership is something of a reversal of past Conservative positions on data collection. They have said in the past they had no plans to change foreign ownership rules on property in Canada. The Conservatives also abolished the Long Form Census in 2010, a decision decried by statisticians and provincial governments.

The announcement drew cautious support from housing activists and academics who have been studying the impact of foreign property ownership in B.C.

University of B.C. geography professor David Ley said any data collection system would have to account for the myriad methods foreign investors are using, such as buying online, buying at foreign property exhibitions elsewhere in the world, and using local proxies to hide ownership.

“I think in the Vancouver market specifically, there are lots of situations where foreign investors are using local proxies in their buying,” he said. “You’ve got to have the subtlety to know if a local address is in fact standing in for what is a foreign capital purchase.”

“I think it is low-hanging fruit for the prime minister,” said Max Cameron, a UBC political science professor. “It is an easy promise to make and a modest sum of money, although probably more than you would need to get the data, and the data would probably show that there is real estate speculation in Vancouver. What a surprise.”

Cameron also said he thinks it’s a smart move “because it is something that voters care about.”

Ley said Harper’s proposal is nonetheless head-scratching, given the Conservative government’s determination to do away with other data-collection initiatives. He noted such collection is also a provincial responsibility.

“I think that is part of the surprise, isn’t it, that the federal government, which has suppressed data, should now be willing to engage in this exercise, especially where you would think there is a provincial role to play,” Ley said.

Although some provinces have restrictions on foreign property ownership, B.C. Premier Christy Clark has resisted calls to begin collecting data about it. In June, she rejected Vancouver Mayor Gregor Robertson’s request for a provincial luxury tax on expensive homes to cool property speculation. The city is also trying to collect data on how many empty homes are owned by foreign buyers.

Eveline Xia, a Vancouver resident who kicked off a public debate about housing affordability under the hashtag #donthave1million, also welcomed Harper’s plan. But she also called it “political opportunism,” driven by the federal election. Still, she said, the prime minister’s position should now motivate the leaders of other parties to weigh in.

“Affordable housing and the collecting of data should not be a partisan issue. I would challenge all the parties to actually match that pledge and go beyond that,” Xia said.

Although Harper provided few details in his announcement, campaign material provided by the Conservatives pointed to rules in other countries that force foreign investors to only purchase homes under construction, or to limit home ownership for foreign nationals to just the time that they live in the country.

Andrey Pavlov, a professor of finance at Simon Fraser University, said it’s hard to accurately tell how much of Metro Vancouver’s market is affected by foreign home ownership.

But he applauded Harper’s promise, saying it will perhaps give researchers like himself a better understanding of the issue.

“I think it is about time. It is great news, especially for people like me in research. It is very surprising but I think it is a huge benefit for society to have that data and appropriate for the government to do it,” Pavlov said.

In the weeks before the election writ was issued, two NDP candidates said they would raise the issue during the federal election campaign. Vancouver Kingsway MP Don Davies said he raised the issue in the House of Commons earlier this year, and Jenny Kwan, the B.C. MLA and federal NDP candidate in Vancouver East, also pledged to campaign for data collection.

Some real estate experts suggest about 15 per cent of the condos in Vancouver are empty year-round, with the owners sitting on the properties hoping to make a profit as the prices of homes rise.

The problem is that many of the estimates of the concentration of home ownership are just that, estimates, because governments haven’t historically tracked the level of foreign investment in Canadian markets, Harper said.

Those rapidly rising costs of homes in places like Vancouver have raised concerns of a bubble in Canada’s hot housing market.

The Bank of Canada has issued warnings about the risks of a housing correction due to overvalued real estate in some areas, suggesting prices are overvalued between 10 and 30 per cent, but it has maintained the sector is likely headed for a soft landing.

Last month, the central bank said the robust housing markets in B.C. and Ontario — in terms of both resale activity and new construction — were a result of rising demand whipped up by “historically low” interest rates.

The bank’s latest monetary policy report also identified foreign investors among the groups fuelling the strong market in those regions.

Harper also said if re-elected he will increase the amount of tax-free withdrawals from RRSPs for first time homeowners.